The Ministry of Finance (MOF) aims to produce a draft version of the controversial capital gains tax on stock transactions within a month, to prevent volatility in the stock market caused by investors’ concerns about the measure, Minister of Finance Christina Liu (劉憶如) said yesterday.
This means the ministry’s task force on taxation and finance — which has listed six issues for priority discussion and is forming separate study groups for each of them — will finish all discussions on the issue by the end of this month, Liu said.
“The study group for the capital gains tax will hold its first meeting by the end of this week,” Liu told reporters after a legislative question-and-answer session.
On Wednesday last week, the 16-member task force chose capital gains tax as its priority issue for discussion, as it believes the imposition of the tax in some form is uppermost in the public’s mind.
However, the day after the announcement, the TAIEX led stock market declines across Asia, with the benchmark index declining 165 points, or 2.1 percent, to close at 7,872.66, its biggest single-day loss since Dec. 19.
Despite this, the ministry has set a September deadline for its first draft of its project to reform the nation’s finances.
During the legislative question-and-answer session, several lawmakers suggested the task force should accelerate the pace at which it discusses the capital gains tax, as uncertainty over the measure would have a negative impact on the stock market.
Liu said the task force would review the current levy of the securities transaction tax and the feasibility of imposing a securities income tax in the hope of finalizing a draft report on the issue within a month.
The study groups for the other five issues under priority consideration would finish all their meetings within three months, Liu added.
Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) said if the ministry would like to introduce a securities income tax, it should make sure the tax’s contribution to government coffers exceeded that of the securities transaction tax.
However, KMT legislator Tseng Chu-wei (曾巨威) said the primary objective of levying a securities income tax was to promote fairness and justice, and not just a matter of how much revenue it brought in.